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The Importance of a Good Umbrella Insurance Policy


When we hear the word umbrella, instinctively we think of the wonderful little contraptions that keep us dry on a rainy day.  We use umbrellas to protect us from the rain.

This concept of protection is the driving force behind umbrella insurance policies. An umbrella insurance policy is additional layer of insurance coverage that you can purchase to provide liability protection for you and your family that goes above and beyond the limits of your existing auto and homeowners’ insurance policies.

Here is how it works:

Each auto and homeowners insurance policy has a coverage limit.  The coverage limit is listed on the declaration or summary of coverage page on the insurance policy.  By way of example, the first coverage listed on most auto insurance policies is Liability or Bodily Injury coverage.  The amount listed next to the Liability / Bodily Injury is the amount of coverage that your insurance company will pay to protect you in the event you are at-fault for causing a car accident that results in injury to another person.  The amount listed is the most that your insurance company will pay – no matter how significant the injuries caused.

If you are like most people, you probably have an auto insurance policy that provides coverage of $100,000 per person / $300,000 per accident.  This means that the most that your insurance company would be responsible is covering in a lawsuit is $100,000 for a person’s damages (i.e. medical expenses, pain and suffering, disability, expenses). If the person is seriously injured and has damages that exceed the amount of your insurance coverage limit, the injured person could come after you and seek recovery from your personal assets.



Umbrella insurance policies are designed to protect this from ever happening. An umbrella is a secondary layer of coverage that would kick in and cover the remaining amount of damages that your auto or home insurance policy could not. It provides a layer of coverage and protection that auto and home insurance policies simply do not provide.

Umbrella policies were traditionally considered only necessary for very wealthy individuals and families to protect their assets. This is no longer the case. Umbrella policies are necessary for any person with a livelihood that wants to protect their assets and family.

Umbrella policies are also relatively inexpensive in comparison to the amount of protection and coverage provided. Policies typically provide coverage ranging from $1 million to $10+ million, and the average cost for an umbrella of $1 million ranges from $150 – $300 annually. That is less than a dollar a day. A small price to pay to protect you and your family.

People often tell me that they cannot afford umbrella policy. My response is:  You cannot afford not to have it.  It is simply that important in my opinion.

If you want to feel secure about protecting your family, assets, and your future, I wholeheartedly recommend purchasing an umbrella insurance.  For a free evaluation of your current insurance policy coverage, please contact the personal injury team at the Quinn Law Group.